Any Labor MP who tuned in on Friday to comments by the head of the federal Treasury, Martin Parkinson, to a parliamentary committee about his personal frustration at negativity in the national political debate could not help but have identified with his angst.

In words that bordered on anger, Parkinson said it seemed to him that most Australians thought they were living in Greece.

“There is an overall negative sense about much of the national discussion,” he said. “Personally, I am somewhat surprised that there is not more focus at the national level on the opportunities that are available to us.

“Yes, we have a multi-speed economy. There are challenges. But Australians have a lot to be optimistic about.”

Parkinson reeled off a long and impressive list of positive economic indicators, and said he believed there could never have been a better time for someone like himself to be a policymaker.

Few Labor MPs would share his sense of exuberance about the times in which they are living.

For most of them, these are the worst of times. And they know it’s only going to get worse before it gets better – if it gets better.

For the Labor caucus, it might as well be Greece for the depth of the despair that pervades the daily Labor conversation.

The rosy future Parkinson says is there for the taking if Australia maximises the host of opportunities it has is of no comfort to a Labor Party facing the horror of having to deal with a deepening crisis about the leadership of Julia Gillard.

The first two weeks of the 2012 parliamentary year produced see-sawing fortunes and emotions on the floor of the Parliament.

Viewed objectively, the Gillard government had two much better weeks than it expected to have.

It secured the passage of key bills, including the symbolically important third-attempt success of its private health rebate means test legislation and a bill to abolish the Australian building and construction industry court.

It finished the two sitting weeks with unexpected good news about unemployment – news that should have been a handy political weapon to use against Opposition Leader Tony Abbott’s negative attack on the government’s economic performance. Expecting a bad figure, Abbott had misstepped shortly before the statistics were released by talking about “an avalanche of job losses” hitting the Australian economy.

Abbott’s stumble capped a bad period for the opposition on economic policy, with daily contradictions and confusion between the three key frontbenchers – Abbott, shadow treasurer Joe Hockey and finance spokesman Andrew Robb.

Treasurer Wayne Swan daily flouted parliamentary rules to ridicule their bumbling by branding them “The Three Stooges” and referring to them separately as Larry, Curly and Mo.

They were good, hard political lines. But like everything else that is happening in Canberra, they barely saw the light of day under the ever more pervasive effect of the Labor leadership issue.

The deep irony of the crisis that surrounds Gillard is that the successes she is having in the Parliament are increasing the despair about her leadership.

What would normally be expected to be good news – or a saleable political achievement – fails to register with the voting public because of the domination of the media agenda by leadership speculation.

As a senior Labor MP who sympathises with Gillard’s plight said after Parliament rose on Thursday: “The leadership issue has overwhelmed us.”

Gillard’s prime ministership is dying by suffocation.

She is now fatally trapped under the weight of events.

In the past two weeks, as she racked up some important successes, what her Labor colleagues saw was a leader incapable of translating her achievements into a message that will get through to voters.

Labor MPs are finally recognising a reality that voters saw long ago – that Gillard is an incomplete leader.

In a room with a small group of people she can be charming and persuasive. She can stitch together deals and get results.

But she can’t sell them. She fails the most critical test of anyone occupying the position – she fails to project to the electorate the authority and demeanour of a prime minister.

Liberal Party officials say this was clear in the research they conducted among voters on election day 2010.

They say Gillard had a short window of opportunity in the first few months after she negotiated the deal with the independents that out manoeuvred Abbott and allowed Labor to form a minority government, but blew it with her broken promise about a carbon tax.

The same MP quoted above offered this grim analysis of Gillard’s situation: “We can no longer pretend to ourselves that this is going to go away, that if Julia racks up some big achievements she can break free of the leadership issue.

“The issue has to come to a head and it has to be soon. The public is utterly sick of it.

“As painful as it will be for a lot of us, Kevin Rudd will come back. That’s because Julia cannot remake herself. Kevin can, although personally I have very deep reservations. But I no longer have the luxury of allowing my reservations about Kevin to blind me to the reality that Julia is beyond saving.”

The end game for Gillard has begun.

gkitney@fairfaxmedia.com.au

The Australian Financial Review

BY Geoff Kitney

Geoff is a senior national affairs writer and columnist in
our Canberra bureau.